Why the complexities of Brexit should be met with simplicity
15 January 2018
Keeping things simple is often the best mantra for success in life’s endeavours. Given the mind-boggling complexity of Brexit, the business community believes that the way to cut through complication is to have a simple, familiar model for the transition to our new relationship to the EU.
As an organisation that represents small, medium and large businesses across the country and in every sector, from food and drink, to aviation and legal services, it’s clear to me that many firms would face significant challenges if we don’t get the UK’s exit right - with knock-on consequences for all of us. So the CBI has proposed a solution: staying in the single market and a customs union for a limited period of transition until a new final deal is in force.
To be clear, the question is not whether to leave the EU, but how. A period of transition, beginning when the Article 50 process ends, would provide firms with continuity and help to dampen uncertainty, protecting jobs, trade and investment.
For businesses making daily decisions about where and how much to invest, we believe our proposal is the simplest answer to the uncertainty they face today. Firms of all sizes and sectors up and down the UK tell us this feels like common sense, though if others have alternatives that deliver equivalent economic benefits now is the time to put them on the table and have those conversations. After all, the clock is ticking.
Staying in the single market guarantees continuity for business operations, while remaining in a customs union guarantees ease of trade, not just with the EU, but with the rest of the world too. Our proposal would at once provide negotiating teams time to iron out details while instilling confidence in companies across Europe during this period of profound change.
Another way of looking at this is to consider the country’s productivity lull which highlights why we should all be concerned about the UK’s historic underperformance compared with our international peers. Productivity matters because it’s the foundation of wages, living standards, and prosperity.
Business is wholly committed to making a success of Brexit. Yet if companies do not know what lies ahead many will not invest, with knock-on effects for productivity, the wider economy and our future living standards. While negotiations are making some progress, there is a long way to go in reaching agreements in many areas. This was always going to be complex after 40 years of membership. But, we are getting a clearer picture on the plans from both parties, with the UK government publishing a steady stream of policy positions throughout the summer – on everything from future data protection and sharing to participation in EU research funding programmes.
Against this backdrop, agreeing transitional arrangements that protect jobs, investment and economic growth seems sensible. Let’s get on with it.
Rain Newton-Smith is chief economist at the CBI
This article was published in our Business Reporter Online: Future CEO.